Question

Mark borrowed $5,500 at 11.5 percent for five years. What is his monthly payment?

Answer 1

Use the formula of the present value of an annuity ordinary which is
Pv=pmt [(1-(1+r/k)^(-kn))÷(r/k)]
Pv present value 5500
PMT monthly payment?
R interest rate 0.115
K compounded monthly 12
N time 5years
Solve the formula for PMT
PMT=Pv÷ [(1-(1+r/k)^(-kn))÷(r/k)]
PMT=5,500÷((1−(1+0.115÷12)^(
−12×5))÷(0.115÷12))
=120.95

So the answer is C

Hope it helps!

Answer 2

Answer:

C option is correct

Step-by-step explanation:

Given: payment borrowed (P)= $5,500

            rate (r)=11.5 or 0.115

           Time(t)= 5 years

           Compound monthly(k)=12

To find : Monthly payment (M)

Formula used :  $M= P/(\frac{1-(1+\frac{r}{k})^{-kn}}{\frac{r}{k}})$

 Solution :     $M= 5500/(\frac{1-(1+\frac{0.115}{12})^{-60}}{\frac{0.115}{12}})$

                by solving we get, M =$120.95

therefore, option C is correct